R&D key to future business success

Research and Development (R&D) has become familiar to all businesses, especially businesses in the field of information technology. Research and development and business management activities have a direct influence on business growth and sustainable development. Therefore R&D is considered a key method in enhancing business competitiveness.

Through government assistance, Vietnamese businesses in the field of information technology such as TMA Solutions Company and Quang Trung Software City (QTSC) have implemented R&D programs. The Hewlett Packard (HP) Development Company recently established a global software research and development center at the cost of US$10 million in QTSC. The HP vice president for emerging markets Francisco Serafini affirmed that Vietnam has many advantages, including abundant human resources, rapid economic growth, an attractive investment environment and good foundations for broadband development. Chu Tien Dung, the QTSC chairman said that the QTSC R&D center promises to replace similar centers in China and India in the future. The center is based on Vietnamese human resource creativity rather than factories. The project is expected to have a major influence on not only businesses but also Ho Chi Minh City’s software and information technology industry.

However, according to information technology experts, R&D products are still limited, mainly being small in scale and revenue, and therefore do not meet their potential. Vietnamese R&D companies exhibit the following tendencies: large companies want to improve technology to create higher value and new products, and newly-established companies wish to obtain competitive advantages through creating unique technologies and products according to the methods of Silicon Valley. However, the number of businesses which invest in R&D is still limited. Businesses choose to simply use available technology, reproducing available products and imitating success models. Tran Phuc Hong, the deputy director of TMA Solution, a large company in the field of R&D, said that in the information technology industry, there is no clear boundary between R&D and other activities such as supplying software services and transferring technology. Therefore, it is difficult to calculate the amount of capital invested in R&D activities. According to Tran Phuc Hong, R&D in information technology is the process of creating new products, technologies and solutions, contributing to strengthening business competitiveness in the market. “If large sources of capital are not poured into R&D, Vietnamese technology will not be developed rapidly like in Chinese Taipei or the Republic or Korea (RoK),” affirmed Tran Phuc Hong.

According to Duong The Luong, the director of VTC Telecommunications Joint Stock Company, until 2015, Vietnam will see strong development of digital content, creating new challenges for businesses. Thus, it is necessary for businesses in the field of digital content to resolve issues related to human resource quality, market development strategies and enhance their competitiveness against foreign companies. The most important factor is focusing on R&D activities to improve competitiveness and contributing to creating a firm niche in the information technology industry. In addition, R&D activities will increase software product value if the domestic market is expanded. Businesses think that an increase in R&D percentage in Vietnamese software products will create more development opportunities for software industry and Vietnamese software industry will escape from being entirely focused on software outsourcing.

Aware of this need, the government has created legal corridors for the R&D industry such as laws on high-technology and intensive technological zone construction. However, experts think that Vietnam should learn from the RoK’s experiences. The government should act as the driving force in this risky field and help transfer technology to businesses. – VEN

Posted by VBN on Apr 20 2011. Filed under Technology. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry